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FOREIGN]

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The deal removes the risk of a fresh election. A prospect that had spooked markets, who feared it might become a de facto referendum on quitting the Euro. Reuters Steve Shearer says that no longer appears to be a factor.>> First of all, the Five Star has said that they're not interensted in doing it now.

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The League, on the other hand, has always said it wanted to exit the Euro, but it said that the timing is not right. Essentially, you have the Five Star in the coallition with them, who says no, and so they're going to block the League's attempt.>> The breakthrough came after the leaders of the two parties patched up their alliance after agreeing to substitute a Euro-sceptic they had initially proposed as the economy minister.

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A nomination for that had been rejected by the country's president, Sergio Mattarella. After several hours of talks in central Rome, the two said they had fulfilled all conditions to form a government. Just a few hours later, their chosen prime minister, Giuseppe Conte, presented his list of ministers.>>

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>> He's a little known law professor who belongs to neither party and hasn't been elected to Parliament. He'll head a cabinet that involves the heads of both parties.>> I think the big test for this government is going to be next year's budget. So this fall when they have to decide how they're going to spend money next year, the compromise that they can come up with will say a lot about lot about how long this government could last.

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>> The European commission welcomed the new government saying it was confident it would cooperate constructively with its EU partners.